A Guide to Doing Business in the United Arab Emirates

III. Foreign Exchange; Investment

There are no currency exchange controls and no restrictions on the remittance of funds (note, however, that the U.A.E. has recently implemented extensive anti-money laundering regulations) except for restrictions on transactions involving Israeli parties or currency. The currency is the U.A.E. Dirham. The exchange rate is pegged at approximately U.A.E. Dirhams 3.67 per United States Dollars 1.00. The exchange rate changes from day to day with the Euro and other currencies.

For a foreign party to establish a business presence in the U.A.E., it would have to either set up a branch or incorporate a company. Generally speaking, three types of branches are available outside the free zones to foreign companies/firms: (i) a branch that can carry out commercial activities (commonly referred to as a branch office), (ii) a branch that can carry out professional/consultancy activities (commonly referred to as a consultancy office) and (iii) a branch that can act only as a liaison office (commonly referred to as a representative office). While such a branch is generally required to have a sponsor who is a U.A.E. national or a company wholly owned by U.A.E. nationals, the sponsor does not hold an equity interest in the branch. The incorporation of a company outside a free zone generally requires local participation.